Oregon biofuel refinery wins $25 million federal grant

By Scott Learn, The Oregonian

December 04, 2009, 10:57AM

ZeaChem has won a $25 million federal grant to build an advanced biofuel plant in Boardman that converts poplar trees to motor vehicle fuel.

The U.S. Department of Energy grant, announced today, will help Colorado-based ZeaChem build a $73.4 million demonstration plant. The company says the “core technology” of the plant will come on line next year.

ZeaChem’s planned refinery was one of 19 nationwide to receive $564 million in grants from federal economic stimulus money. The grants will leverage private investment and non-federal subsidies of $700 million, the energy department said.

The federal government’s biofuel mandates call for 21 billion gallons a year of advanced fuels — those that cut greenhouse emissions by half or more compared to petroleum-based fuel — by 2022.

Woody “cellulosic” feedstocks — from trees to switch grass to forest slash — are not food crops, don’t require fertilizer and can grow on marginal lands. As feedstocks, they should be more stable in price than food crops such as corn and soybeans.

But the technology for breaking down cellulose is still developing, and critics question whether advanced biofuels will be able to compete on cost with conventional fuel.

ZeaChem plans a 250,000-gallon capacity demonstration plant in Boardman. The company will take fast-growing poplar trees from a nearby 17,000-acre tree farm owned by GreenWood Resources of Portland, then convert the material to ethanol using microbes found in termites.

Additional feedstocks, including agricultural residues, will also be evaluated in the pilot plant, the energy department said.

ZeaChem officials say the company’s fuel will have 12 times the energy content that went into producing it and needs far less land than ethanol made from corn. The company’s investors include Valero Energy, the largest oil refiner in the United States.

— Scott Learn